RITES Limited (NSE:RITES) Second-Quarter Results Just Came Out: Here's What Analysts Are Forecasting For This Year

RITES Limited (NSE:RITES) came out with its quarterly results last week, and we wanted to see how the business is performing and what industry forecasters think of the company following this report. RITES reported in line with analyst predictions, delivering revenues of ₹5.5b and statutory earnings per share of ₹8.01, suggesting the business is executing well and in line with its plan. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

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Taking into account the latest results, the consensus forecast from RITES' four analysts is for revenues of ₹26.0b in 2026. This reflects a decent 16% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to increase 5.2% to ₹9.00. Yet prior to the latest earnings, the analysts had been anticipated revenues of ₹26.6b and earnings per share (EPS) of ₹8.50 in 2026. So it's pretty clear that while sentiment around revenues has declined following the latest results, the analysts are now more bullish on the company's earnings power.

Check out our latest analysis for RITES

The consensus has made no major changes to the price target of ₹282, suggesting the forecast improvement in earnings is expected to offset the decline in revenues next year. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. The most optimistic RITES analyst has a price target of ₹291 per share, while the most pessimistic values it at ₹276. This is a very narrow spread of estimates, implying either that RITES is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. It's clear from the latest estimates that RITES' rate of growth is expected to accelerate meaningfully, with the forecast 35% annualised revenue growth to the end of 2026 noticeably faster than its historical growth of 2.0% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 13% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect RITES to grow faster than the wider industry.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards RITES following these results. They also downgraded RITES' revenue estimates, but industry data suggests that it is expected to grow faster than the wider industry. Even so, long term profitability is more important for the value creation process. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have forecasts for RITES going out to 2028, and you can see them free on our platform here.

However, before you get too enthused, we've discovered 1 warning sign for RITES that you should be aware of.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.